Cyril Widdershoven highlights logistical bottlenecks and rising costs as Houthi threats force Saudi crude to bypass the Red Sea.

Cyril Widdershoven, a senior maritime and energy analyst, reports that Saudi Arabia is facing a significant logistical challenge as Houthi-led maritime threats disrupt traditional oil routes. While the Kingdom has utilized its East-West Pipeline to move crude to the Red Sea port of Yanbu, a sustained Houthi blockade has made the Bab el-Mandab strait increasingly inaccessible. This forces tankers to take a longer, more expensive route through the Suez Canal and around Africa's Cape of Good Hope. The detour adds thousands of nautical miles to voyages, extending transit times from approximately 19 days to 48 days. These longer routes increase transportation costs by roughly $2.5 million to $5 million per tanker, depending on the specific route and vessel type. Furthermore, the Suez Canal and the SUMED pipeline are reaching their capacity limits, creating bottlenecks for the large very large crude carriers (VLCCs) that Saudi Arabia relies on. As a result, global oil markets are experiencing higher freight rates and increased insurance premiums, with Brent crude prices reflecting these growing supply chain pressures.

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